Reverse Mortgages Fill A Need – Here Are Key Features
Reverse mortgages can be a little difficult to understand, and they are not for everybody and don’t work in every situation. They are controversial. However, they can propel a purchase and they can be a lifeline to seniors on a fixed income who possess a lot of equity in their home. You should always consult your family tax accountant, financial planner, or family tax attorney for information germane to your specific situation and for full understanding of the product. Here are some key features:
1. You don’t have to move. you can tap into your home’s equity and still keep your current home.
2. You don’t have any monthly mortgage payments. The loan is repaid when the last surviving spouse moves out, sells, or dies.
3. You can get money in monthly installments, as a lump sum payment, as a line of credit or a combination of the three. You can use the money however you wish.
4. Monthly interest also is added to the loan balance, so interest costs are compounded– that is, you’re paying interest on the interest.
5. If the amount owed eventually exceeds your home’s value, you’re not liable for the deficit. The total amount due will never exceed 95% of the home’s appraised value.
6. Lenders can foreclosure on the home if you fail to adequately maintain the property, default on property taxes insurance or homeowners association dues. Be careful and make sure you fully understand this loan product. Source: OC Register